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Financial Audits

Achievement Empowered by Accountability

Accountability is foundational to accomplishing The School District of Lee County’s mission to help students reach their highest personal potential. That is why we undergo a wide variety of audits conducted by professionals who are independent from the District. These experts regularly and repeatedly evaluate the quality of our financial practices, the integrity of our operational procedures, and the efficiency of our work. Their results reveal excellence in our operations, and our accountability empowers us to achieve the best for you!

Award Icon
2003-2017: Received The Association of School Business Officials (ASBO) Certificate of Excellence in Financial Reporting award; and The Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting award.

OPPAGA Audit

In 2018 a Performance Audit of District operations was conducted by the Office of Program Policy Analysis & Government Accountability (OPPAGA). The State legislature passed a law on July 1, 2018, requiring any school district seeking a sales tax referendum to have an audit conducted by OPPAGA, with the results posted on the district website 60 days prior to the referendum date (November 6, 2018). The audit was completed and the results, illustrating efficient and effective performance of District operations, were publicly posted on the District website on August 31, 2018.

Efficiency Audits

In 2017 the School District of Lee County engaged Gibson Consulting Group (Gibson) to conduct an Educational and Operational Efficiency Study to assess the efficiency and effectiveness of the district’s major programs and its administrative and operational areas. This report contains Gibson Consulting’s observations and recommendations to help the district achieve greater effectiveness, efficiency, and educational outcomes.

Operational Audits

The School District of Lee County’s operational audits promote accountability and achievement. Operational Audits are conducted by the Florida Auditor General every three years, as required by law. The purpose of these recurring Operational Audits is:

  • To evaluate whether the District complies with laws, rules and regulations, and properly protects District assets;
  • To examine the District’s internal policies including controls designed to prevent and detect fraud, waste and abuse, and to suggest improvements; and
  • To determine if the District’s financial and operational data are reliable and complete.

Financial Audits

The School District of Lee County is required by the State of Florida to conduct financial audits every year. Every three years we coordinate with the Florida Auditor General to conduct an audit of our finances and federal grants. During the two years in between, we hire an independent Certified Public Accounting (CPA) firm to conduct a financial audit.

2017 Financial Statements

  • Opinion / Compliance: Unmodified (no issues)
  • Material Weaknesses: No
  • Significant Deficiencies: None Reported
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: N/A
  • Auditor: State of Florida Auditor General

2017 Federal Awards (Grants):

  • Opinion / Compliance: Compliant
  • Material Weaknesses: No
  • Significant Deficiencies: None Reported
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: Yes
  • Auditor: State of Florida Auditor General

2016 Financial Statements

  • Opinion / Compliance: Unmodified (no issues)
  • Material Weaknesses: No
  • Significant Deficiencies: None Reported
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: N/A
  • Auditor: Moore Stephens Lovelace, P.A.

2016 Federal Awards (Grants):

  • Opinion / Compliance: Compliant
  • Material Weaknesses: No
  • Significant Deficiencies: None Reported
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: Yes
  • Auditor: Moore Stephens Lovelace, P.A.

2015 Financial Statements

  • Opinion / Compliance: Unmodified (no issues)
  • Material Weaknesses: No
  • Significant Deficiencies: None Reported
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: N/A
  • Auditor: Mauldin & Jenkins, LLC

2015 Federal Awards (Grants):

  • Opinion / Compliance: Compliant
  • Material Weaknesses: No
  • Significant Deficiencies: None Reported
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: Yes
  • Auditor: Mauldin & Jenkins, LLC

2014 Financial Statements

  • Opinion / Compliance: Unmodified (no issues)
  • Material Weaknesses: No
  • Significant Deficiencies: None Reported
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: N/A
  • Auditor: State of Florida Auditor General

2014 Federal Awards (Grants):

  • Opinion / Compliance: Compliant
  • Material Weaknesses: No
  • Significant Deficiencies: None Reported
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: Yes
  • Auditor: State of Florida Auditor General

2013 Financial Statements

  • Opinion / Compliance: Unmodified (no issues)
  • Material Weaknesses: No
  • Significant Deficiencies: Yes, resolved

Prior Period Adjustment - Item 1

The District is responsible for accurate financial reporting which includes detecting and preventing misstatements in the financial statements, as well as within the underlying financial records on a timely basis. As a result of our audit procedures, we recommended a prior period adjustment to increase net position in the Self-Insurance Health Internal Service Fund and governmental activities for an overstatement of health insurance premiums for July and August 2012 that were recorded as advanced revenue (liability) as of June 30, 2012, in the amount of $2.768 million. The error was identified by District’s management and was recorded through current year activity; however, we proposed an adjustment to restate the beginning net position. As a result of this prior period adjustment, the District has a significant deficiency regarding the fairness of financial reporting. We recommend the District implement procedures to identify and ensure all entries are properly recorded on a timely basis to facilitate the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America.

RESOLVED

In Finding 13-01 , you note a prior period adjustment of $2. 768 million that should have been made to the health insurance fund. As you note in your finding, we did discover this error and made an adjustment to the current period. However, as you stated, the adjustment should have been made to the prior period. We have made the necessary prior period adjustment, and will work to ensure that all future necessary adjustments are made to the proper time period in accordance with generally accepted accounting principles.
  • Non-compliance: No
  • Findings reported: No
  • Low Risk: N/A
  • Auditor: Mauldin & Jenkins, LLC

2013 Federal Awards (Grants):

  • Opinion / Compliance: Compliant
  • Material Weaknesses: No
  • Significant Deficiencies: Yes, resolved

    Suspension and Debarment - Item 1

    During our audit, we noted that the District entered into two procurement contracts for goods and services using Federal funds in the amounts of $32,500 and $136,993 for the Career and Technical Education, Basic Grants to States program and two procurement contracts for goods and services in the amounts of $313,234 and $245,590 for the Race-to-the-Top Incentive Grants program without verifying that the vendors were not suspended or debarred from receiving Federal funds. U.S. Office of Management and Budget (OMB) Circular A-133 provides that when a non-Federal entity enters into a transaction with a vendor receiving Federal money of $25,000 or more, the non-Federal entity must verify that the vendor and its principals are not suspended or debarred from receiving Federal funds. This verification may be accomplished by checking the Excluded Parties List System, collecting a certification from the entity, or adding a clause or condition to the contract with the vendor. Although we verified that the vendors were not included on the Excluded Party List, audit procedures cannot substitute for management’s responsibility to establish and maintain an adequate system of internal control.

    RESOLVED

    Finding 13-02 noted that four procurement contracts in excess of $25,000 were awarded to vendors without the proper check for suspension or debarment. The District agrees with this finding, and will implement procedures to ensure this verification is accomplished before entering into a transaction with a vendor.
    • Non-compliance: No
    • Findings reported: No
    • Low Risk: Yes
    • Auditor: Mauldin & Jenkins, LLC

    2012 Financial Statements

    • Opinion / Compliance: Unmodified (no issues)
    • Material Weaknesses: No
    • Significant Deficiencies: None Reported
    • Non-compliance: No
    • Findings reported: No
    • Low Risk: N/A
    • Auditor: Mauldin & Jenkins, LLC

    2012 Federal Awards (Grants):

    • Opinion / Compliance: Compliant
    • Material Weaknesses: No
    • Significant Deficiencies: None Reported
    • Non-compliance: No
    • Findings reported: No
    • Low Risk: Yes
    • Auditor: Mauldin & Jenkins, LLC

    2011 Financial Statements

    • Opinion / Compliance: Unmodified (no issues)
    • Material Weaknesses: No
    • Significant Deficiencies: None Reported
    • Non-compliance: No
    • Findings reported: No
    • Low Risk: N/A
    • Auditor: State of Florida Auditor General

    2011 Federal Awards (Grants):

    • Opinion / Compliance: Compliant
    • Material Weaknesses: No
    • Significant Deficiencies: Yes, resolved
    • Non-compliance: Yes, resolved

    Spending & Reporting - Item 1

    The District generates and reviews quarterly reports to monitor its State and local maintenance of effort expenditure requirements; however, the District mistakenly included American Recovery and Reinvestment Act (ARRA) funds in its calculations, which should be excluded to demonstrate compliance. Consequently, for the 2010-11 fiscal year, District records indicated that State and local expenditures, in total and average per capita, decreased from the 2009-10 fiscal year to the 2010-11 fiscal year. In addition, District records did not evidence that the District met a qualified exemption from the maintenance of effort requirement. Consequently, the deficiency in maintenance of effort from State and local funds totaling $514,035 represents questioned costs subject to disallowance by the grantor. Without effective procedures to monitor applicable maintenance of effort requirements, the risk increases that State and local funds will not be properly allocated and expended for special education services.

    RESOLVED

    The District agrees that controls over resources expended for special education programs are critical. Our understanding of the allowance for reduction of maintenance of effort due to increase from prior year entitlement was different than what is presented in this finding. The IDEA ARRA entitlement was given to districts for a two year period. Because the entitlement was intended to be used over a two year period, we included IDEA ARRA expenditures from 2011 and 2010 in the comparison for allowance of reduction of MOE. Our calculation led to additional allowance of reduction of MOE, and is what we relied on to monitor our compliance. We will be applying for a waiver from the DOE, but are also prepared to restore the questioned amount if that waiver is denied.

    Spending & Reporting - Item 2

    Title 34, Section 80.23, Code of Federal Regulations, provides that where a funding period is specified in a Federal award, a grantee may charge to the award only costs resulting from obligations incurred during the funding period. The District received Special Education - ARRA grant funds, totaling approximately $13.2 million, with a grant period from April 20, 2009 to September 30, 2011. The District used grant proceeds, totaling $526,005, to lease an online individual education plan (IEP) case management software system for the period July 1, 2010 through June 30, 2015. The Florida Department of Education-approved grant application for this program included a line item amount of $108,000 for this lease.

    RESOLVED

    The District will enhance its procedures to include a regular review of all purchases approved by Departments using grant funds. However, according to the Reference Guide for State Expenditures, page 13, "Advance payment may be made for maintenance agreements, software license agreements, and subscriptions that meet one of the following criteria: Advance payment will result in a savings to the Stat that is equal to or greater than the amount the State would earn by investing the funds and paying in arrears. The goods or services are essential to the operation of a state agency and are available only if advance payment is made. Prior approval or the Bureau or Auditing is required for advance payments made for maintenance agreements, software license agreements, and subscriptions that exceed the threshold or Category Two as defined by s. 287.017, F.S." The purchase or the IEP software, meets the criteria one (1) because of the savings based on the cost per FTE and product price Increases. Staff will continue to work with District Departments to ensure that advance payments are handled in accordance with the guidelines or prior approval by Florida Department of Education.

    Spending & Reporting - Item 3

    United States Office of Management and Budget Circular A -133 requires the District to prepare a Schedule of Expenditures of Federal Awards (SEFA) that contains certain information, such as a list of Federal programs by Federal agency, individual Federal programs within a cluster of programs, and the total Federal awards expended for each Federal program. Also, Circular A -133 requires the District to obtain compliance audits of major Federal awards at least once every three years for awards with expenditures that equal or exceed $3 million for entities with Federal expenditures exceeding $100 million but less than $10 billion In addition, Title 2, Section 176.210(b), Code of Federal Regulations, as amended in April 2009, requires the District to separately identify the expenditures for Federal awards under the American Recovery and Reinvestment Act (ARRA) on the SEF A.

    RESOLVED

    The District will enhance its procedures to ensure the accuracy or the Schedule of Expenditures or Federal Awards.
    • Findings reported: No
    • Low Risk: Yes
    • Auditor: State of Florida Auditor General

    2010 Financial Statements

    • Opinion / Compliance: Unmodified (no issues)
    • Material Weaknesses: No
    • Significant Deficiencies: Yes, resolved

    Recording & Reporting - Item 1

    Criteria: Compensated absences should reflect the District's actual liability as of the fiscal year end for all employees of the District. Condition: Employees who were not active employees at the district during FY10 were included in the compensated absences liability balance. Cause: In the prior years, data was transferred from the Legacy system into a manually kept spreadsheet to calculate compensated absences. This process was separate from the payroll process which required changes to be made in the compensated absences for any changes made in the payroll system. When the information was input into the PeopleSoft payroll module during the fiscal year, employees that should have been removed were improperly included. Effect: The government wide financial statements showed a liability balance that was over-stated by $889,847 in the current year. The District made an adjustment to compensated absences deletions in the current year for this amount. Recommendation: CBH recommends that the compensated absences process be integrated into the PeopleSoft system to ensure that when employees are terminated in the payroll module, their associated liabilities are also removed from the system.

    RESOLVED

    Management recoded erroneous employees and corrected any other data entry errors in the PeopleSoft system. Going forward, the compensated absences module is integrated with the payroll process which will ensure that all data is simultaneously updated for changes and the process is automated to prevent manual processing errors.
    • Non-compliance: No
    • Findings reported: No
    • Low Risk: N/A
    • Auditor: Cherry Bekaert & Holland, LLP

    2010 Federal Awards (Grants):

    • Opinion / Compliance: Compliant
    • Material Weaknesses: No
    • Significant Deficiencies: None Reported
    • Non-compliance: No
    • Findings reported: No
    • Low Risk: Yes
    • Auditor: Cherry Bekaert & Holland, LLP